2018 GS Paper I, all questions
UPSC Prelims 2018 · GS Paper I
Question 47: Economy and Social Development
If a commodity is provided free to the public by the Government, then
athe opportunity cost is zero.
bthe opportunity cost is ignored.
cthe opportunity cost is transferred from the consumers of the product to the tax-paying public.
dthe opportunity cost is transferred from the consumers of the product to the Government.
AnswerUPSC’s answer is (c).
Nothing is truly free. When government provides a good free of charge, resources are still used up to produce it, so an opportunity cost remains. The consumer no longer pays at the point of use, but the cost is met from tax revenue, so it falls on the taxpayers. The opportunity cost therefore does not vanish or get ignored; it shifts from the users of the product to the tax-paying public.
Why each option is right or wrong
- (a) Wrong: the resources used still have alternative uses.
- (b) Wrong: the cost is not ignored; it is borne by someone else.
- (c) Right: the cost shifts to the taxpayers who fund it.
- (d) Wrong: the Government funds it from taxes paid by the public.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2018, General Studies Paper I, Series A. The paper on upsc.gov.in.